The Underwriter's Insider November 2017 by The Underwriter's Insider

IN THIS ISSUE NOVEMBER 2017 Vol 13 Issue 11 5

How To Check If Someone Has Read Your Email by Kim Komando

Alabama Agent Convicted In Fraud

California Insurance Agent and Lawyer Accomplice Arrested For $1.2 Million Senior Scam

The Need For Professional Insurance Claims Handlers by Barry Zalma, Esq.

Five Reasons Sleep Is Key For Success by Merilee Kern, MBA

A.M. Best’s 2017 Market Briefing In London To Focus On Impact Of Brexit, M&A and the Rise of Protectionism

Mercury Insurance In Battle With California Commissioner - To Take Ruling To U.S. Supreme Court

Lemonade Too Sour? Smug Start-Up Insurance Company Imposes Gun Politics On Policyholders

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THE LAAIA 2017 TRADE FAIR BOOTH IMAGES Former CFO of Louisville MGA Guilty of Embezzling $2 Million Over a Two Year Period

Georgia Announces Arrest of Insurance Agent

Aspirin A Day Keeps Cancer Away? New, Surprising Study...

Elizabeth Boyd Promoted To Florida Deputy Chief Financial Officer

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Registration Now Open For 2018 IRMI Energy Risk & Insurance Conference

There is Workers’ Comp Fraud, Then There is Abusing The Little Guy as a SubContractor While Committing Workers’ Comp Fraud by Michael Speizman

Unbelievable Vintage Ads - Another In Our Series Of Ads From The 30s, 40s, 50s & 60s.

Hollywood Gushes Over Harvey & Bob Weinstein: A Compilation

Watch the Fastest Car in the World - and the Only One To Break the Sound Barrier!

PREFER TO READ OFFLINE? DOWNLOAD & VIEW PDF: HERE!

FEATURES 29

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$1.2 Million Work Comp Scam Leads To Arrest of Florida Construction Company Owner

HOV or Not? The Advisor Tackles The Age Old Problem - As Well as Aviation BirdStrikes

Miami Insurance Agent Charged With Creating Fake Policies To Rip Off Premium Finance Company

Michelle Obama: Too Many White Men - The New, Totally Acceptable, Racism...

California’s Insurance Commissioner Predicts Total Disaster if Women Have to Pay for Their Own Birth Control Pills...

Kim Komando Barry Zalma

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NOVEMBER 2017 INSURANCE • POLITICS • TECHNOLOGY • PEOPLE

A Publication of AdMax Corp., Inc. Corporate Offices P.O. Box 31551 Palm Beach Gardens, Florida 33420 Ron Manera, Publisher/Senior Editor Join Me On Linkedin: HERE Follow Me On Instagram: @rmanera 561.718.0745 • ron@insurmedia.com

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TECHNOLOGY

HOW TO CHECK IF SOMEONE HAS READ YOUR EMAIL

Really Cool Info - by Kim Komando

ou write an email. No reply. You send another email. No reply. You’re halfway through a third email and you stop. What happened to the first two? Junk folder? Were the messages just ignored?

is read. Better yet, read receipts nudge the recipient into writing back as soon as possible. This is especially helpful for tracking urgent and time-sensitive messages.

In the 21st Century, our inboxes are flooded. According to the technology market research company The Radicati Group, the average adult will receive 92 email messages per day in 2017. That doesn’t even count the spam that pours into our accounts. The longer we wait for an answer, the more we wonder whether the message was seen at all.

Depending on your platform, here are various ways to know if someone has opened and read your email. Request a Return Receipt

The communications stream is compounded by text messages. You send a text and you expect an immediate reply. But what if you don’t get a reply? Click here to learn how you can tell when someone is seeing your text messages. Related: Ever wished that you That’s why “read receipts” were could “unsend” an email? Tap invented. This tool will tell you here for the steps. the exact time that your message NOVEMBER 2017

There is a drawback: privacy. Read receipts are great for you, because you have an idea of what is taking place in the recipient’s inbox. But some people find receipt requests intrusive and never send them back. There are ways to turn to “invisible” third-party email trackers, which will send you a receipt without the recipient ever knowing.

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Read receipts are much more common than most people realize. Most major email platforms will give you the option to request return/ read receipts with email that you send. Some will also let you specify these receipts for every email you’re composing.

See Kim Komando Pg 44 www/underwritersinsider.com

INSURANCE & THE LAW

THE NEED FOR PROFESSIONAL INSURANCE CLAIMS HANDLERS Expert Analysis & Commentary by Barry Zalma, Esq., CFE Insurance is Needed to Maintain a Modern Society

Since insurance is a contract of the utmost good faith insurance claims adjusters were created to assist the insured to present and prove a claim to avoid and lmost every business, recover from a casualty. It is every homeowner, every property owner Join Barry Zalma’s Blog: lack sufficient assets to cover a http://www.zalma.com/blog contingent or unknown event, an accident, a tort lawsuit, a fire, or other casualty. Insurance, by spreading the various risks of loss among many, allows a business, the obligation of the insurance property owner, or individual to adjuster – acting for the insurer cover the risks of loss and avoid – to do nothing that will deprive the insured of the benefits of bankruptcy. the contract of insurance. To do “Insurance is a contract whereby so, the adjuster must treat the one undertakes to indemnify insured fairly and in good faith another against loss, damage, or and do so with the knowledge liability arising from a contingent and experience necessary to or unknown event.” [California act as a professional insurance adjuster. insurance Code Section 22]

If the insurance industry is to survive it must train and maintain a staff of professional insurance claims people, recognize that it is the claims person who keeps the promises made by the insurance policy, and that if those promises are not kept the insurer and the insurance industry will fail. No matter how many dollars of premium are collected by the insurer, if its claims people are not professional, the premiums collected will be insufficient to keep the insurer in business. I started in the business of insurance 50 years ago. I was trained to be a professional claims adjuster and that training was an important component of my ability to become an effective, competent, professional insurance coverage lawyer and author. How that happened

Barry Zalma, Esq., CFE, practiced law in California for more than 43 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. 6

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began in 1967 when I sought work after leaving my term with the U.S. Army. The Creation of a Professional Insurance Adjuster Fifty years ago, I had completed three years in the U.S. Army as a counter intelligence investigator and, seeking employment that allowed me to use the skills I learned, found work in the insurance industry. After a few interviews I was hired as an insurance claims trainee by the Fireman’s Fund American Insurance Company. I knew nothing about insurance although I had purchased insurance for my automobile. Like most people I had never read an insurance policy.

modern insurance companies, the Fireman’s Fund was willing to take the time and money to properly train me.

all of the book, taking notes, asking questions, and learning about insurance claim handling I was put under the care of a working, experienced, workers’ compensation insurance adjuster The Beginning of My Training and hearing representative. I My first week on the job I was spent a week with the adjuster sat at a desk with a copy of a visiting multiple scenes where a book by Paul I. Thomas called worker was injured. I also sat next “Adjustment of Property Losses” to the adjuster who represented which was, then, the bible of the Fireman’s Fund at hearings before claims industry. For my first week the Workman’s Compensation on the job, paid the munificent Appeals Board (before its sum of $550 per month, I name was changed to the Workers’ Compensation Appeals Board) while he argued facts and law to the WCAB judge. As a result, I received a basic understanding of what a Workman’s Compensation adjuster did.

I have spent 50 years in the business of insurance and do not regret a single moment of my career. By writing, lecturing and conducting webinars I have attempted to help insurers and their claims staff become professional and provide excellence in claims handling.”

The Fireman’s Fund knew, back in 1967, that an insurance policy was a group of promises. It knew that it needed to keep each and every promise made by the insurance policy and that only an experienced, professional and excellent claims staff could keep those promises.

read the book. When I didn’t understand something, I was told to ask a supervisor who would take the time to explain to me the meaning of the comments made by Mr. Thomas in his text. The supervisor was patient and understood that I was totally The Fireman’s Fund expected ignorant about insurance and, if nothing of me other than an the training program was to be ability and desire to learn. successful, it was necessary to They wanted me to become a take the time to educate me. professional insurance claims adjuster and, unlike most After spending the time to read NOVEMBER 2017

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The next week I was assigned to a property adjuster. I went with the adjuster to the site of dwelling fires, thefts, vandalism, and almost every other type of casualty that could befall a piece of real or personal property. I learned how an adjuster creates a scope of loss, how to measure and diagram a loss scene, how to calculate the amount of damage, how to deal with contractors, how to obtain true values of personal property and how to depreciate property to arrive at actual cash value. See Zalma Page 40 www/underwritersinsider.com

LIFE INFO

5 REASONS SLEEP IS KEY FOR SUCCESS By Merilee Kern, MBA

leep. All people need it, most crave it, but throngs of individuals do not get the kind of restorative and rehabilitative sleep required to optimize mental clarity, focus, ideation, awareness, productivity and overall performance. The CDC actually declared “insufficient sleep” an “important public health concern.” Enter Alvaro Vaselli, founder and CEO of Nuvanna—a sleep science and productivitydriven company—whose passion lies with solving common problems many people commonly experience

Photo Credit: Drew Gurian Courtesy Nuvanna

during the night, allowing them to achieve balance in their overall life through a consistently goodnight’s sleep. “Many

sleep-related

are extraordinarily easy to rectify, and can have a relatively immediate impact,” Vaselli notes. “When the body achieves a natural flow with issues the mind, it makes a difference

bout the author: Branding, business and entrepreneurship success pundit, Merilee Kern, MBA, is an influential media voice and lauded communications strategist. As the Executive Editor and Producer of “The Luxe List International News Syndicate,” she’s a revered brand and consumer product trends voice of authority who spotlights noteworthy marketplace change makers, movers and shakers. Merilee may be reached online at www.TheLuxeList.com. Follow her on Twitter here: http://twitter.com/LuxeListEditor and Facebook here: www. Facebook.com/TheLuxeList

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LIFE INFO in how a person experiences the world.” With this in mind, below are Vaselli’s easy-to-follow strategies that leverage the power of a quality-night’s sleep for getting ahead in life. Mental Clarity It is no surprise that professional athletes are always on the lookout for every single advantage they can utilize in order to outperform their opponents. With a career that spans a maximum of 15 years, they want to stay on top of their game for the duration. “Brady is the healthiest great champion the NFL has ever had, both physically and mentally” (Sally Jenkins, The Washington Post). The longtime New England Patriots quarterback, with multiple Super Bowl victories and MVP awards, is widely regarded as an athlete whose training and determination pushed him from a mediocre sixth-round draft position to the most-revered and respected professional football player of his generation. Brady is very open about his approach to a more natural, healthier way of exercising, training and living which challenges some commonly held assumptions NOVEMBER 2017

around health and wellness. He makes lifestyle choices that amplify and extend his performance as well as his quality of life. The same principles that Brady uses to outperform his opponents on the football field can be used by anyone. One of the key factors to this edge is mental clarity, which simply cannot happen in a body that is running on fumes.

Better Sleep = Better Temperament = Better Relationships = Greater Success As stated above, those who are well rested report feeling happier and less stressed than their counterparts. Relationships are major components to winning in life, both personally and professionally.

Those who are well rested can model positive, healthy “When people have slept less, relationships. By giving one’s it’s a little like looking at the See Sleep Key To Success Page 34 world through dark glasses,” according to Janice KiecoltGlaser, longtime relationship scientist and director of FREE the Ohio State Institute for CLASSIFIEDS! Behavioral Medicine Research. “The well-rested brain HELP WANTED — POSITION versus the sleepy brain will WANTED 4 — SALE ITEMS accomplish much more but CLICK HERE! will also be happier and less stressed while doing so.” When groggy and sleep-deprived during the day, in addition to one’s overall quantity of stress, and quality of performance will also be worse than someone who consistently receives eight or more hours of deep sleep. Those who make a commitment to deep, uninterrupted sleep for eight or more hours report more focus, more energy and more motivation than their counterparts.

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NEWS

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NEWS

A.M. BEST’S 2017 MARKET BRIEFING IN LONDON TO FOCUS ON IMPACT OF BREXIT, M&A AND THE RISE OF PROTECTIONISM

ONDON--(BUSINESS WIRE)--A.M. Best will host its annual Insurance Market Briefing – Europe & Methodology Review Seminar on Wednesday, 15 November, from 8:30 a.m. to 4:00 p.m., at ETC Venues St. Paul’s in London. The briefing will be held from 8:30 a.m. to 1 p.m., and the seminar will run from 2:00 p.m. to 4:00 p.m. The conference will provide a platform for leading A.M. Best rating analysts and industry experts to discuss the impact of prevailing economic and political conditions and rating trends for (re)insurers in key segments of the European (re)insurance sector and the London Market.

conducted by A.M. Best. A panel of senior industry spokespersons will deliberate on the global reinsurance sector’s strains and opportunities, including the impact of insurance-linked securities (ILS) on the sector. The annual Methodology Review Seminar will examine the latest updates to rating criteria and will provide attendees with a better understanding of the modifications recently made to Best’s Credit Rating Methodology

(BCRM) and the proprietary Best’s Capital Adequacy Ratio (BCAR) model. Registration can be made online at http://www.ambest.com/ events/imbeurope/. Enquiries can be addressed to events@ambest. com. A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www. ambest.com.

Jon Hancock, Performance Management Director, Lloyd’s of London will deliver the keynote address on the topic: Performance Management in a changing world. This year’s market briefing will also offer thematic sessions on issues of protectionism, Brexit, M&A and reinsurance trends based on insurance market intelligence and research as NOVEMBER 2017

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THE LAAIA 2017 TRADE FAIR BOOTH IMAGES ARE NOW ONLINE! CLICK IMAGE BELOW TO VIEW

NEWS

FORMER CFO OF LOUISVILLE MGA GUILTY OF EMBEZZLING $2 MILLION OVER A TWO YEAR PERIOD PLUS TAX EVASION

As CFO, Sylvia Rebecca Smith Diverted Funds From Employer Market Finders MGA To A Retail Agency Owned by Her Husband

OUISVILLE, Ky. – The former loan checks from her employer and husband used a portion of the Chief Financial Officer of diverted it into the bank account of fraudulent loan proceeds to fund Market Finders Insurance PBS. her husband’s business and to pay Corporation, pleaded for personal expenses for Smith admitted creating guilty in United States herself and her husband District Court yesterday to pay for gambling fraudulent insurance financing and afternoon, before activity. contracts between Market Finders Magistrate Judge Dave Whalin, to tax evasion Further, Smith used a Premium Budget and existing insurance and embezzling nearly portion of the proceeds $2,000,000 during a two clients of PBS Insurance without the to make payments on year period announced the previous loans she United States Attorney knowledge of those existing clients. Smith had falsely created from Russell M. Coleman. admitted to manipulating the records Market Finders Premium Budget. When the scheme so that her theft of funds would not be Sylvia Rebecca Smith, was discovered by Market 63, of Louisville, was Finders and brought to an detected by her employer.” charged by Information end, Smith had not repaid with one count of wire fraud approximately $674,093. for devising an embezzlement Specifically, during the relevant scheme to obtain money from her time period, the defendant devised Additionally, Smith admitted to employer, Market Finders Insurance a scheme to embezzle funds from failing to report approximately Corporation (“Market Finders”) Market Finders and Market Finders $258,504 in embezzled funds and then diverting those funds Insurance Premium Budget Corp. as income for tax year 2013 and to PBS Insurance Underwriting (“Market Finders Premium Budget”), omitted approximately $514,696 in Corporation, and two counts of a subsidiary of Market Finders, embezzled funds as income for tax failing to report embezzled funds by creating fraudulent insurance year 2014 on Form 1040 of the U.S. as income on her tax returns. At the financing contracts between Market Individual Income Tax Return. time, Smith was the bookkeeper for Finders Premium Budget and existing PBS Insurance and her husband was insurance clients of PBS Insurance At sentencing, Smith agreed to pay the sole owner. without the knowledge of those $674,093 restitution and could be existing clients. Smith admitted to sentenced to no more than 26 years According to the plea agreement, manipulating the records so that her in prison. Smith was released from Smith admitted that from July theft of funds would not be detected federal custody on a $25,000 bond of 2013 through April of 2015, by her employer. and is scheduled for sentencing while employed as CFO of Market before Chief Judge Joseph H. Finders, she generated fraudulent Smith admitted that she and her McKinley, Jr. on February 5th.

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NEWS

GEORGIA ANNOUNCES ARREST OF INSURANCE AGENT

tlanta – Insurance Commissioner Ralph Hudgens announced that Carroll County insurance agent Lynne Marie Webb, 33, was arrested today on seven counts of insurance fraud and three counts of forgery in the first-degree for taking insurance premiums from her clients and issuing them fraudulent payment receipts.

theft, Webb was employed by the Robert Kenimer State Farm Agency, in Carrollton, Ga. Fraud investigators believe that Webb embezzled approximately $2,712.00. “Mrs. Webb’s actions have put consumers at significant financial risk,” said Hudgens. “I will not tolerate any insurance agent stealing from Georgia consumers.” Webb is currently being held in the Carroll County Jail awaiting bond. A disciplinary action against her license to sell insurance is currently under review by the Department of Insurance. The case will be prosecuted by the Carroll County District Attorney’s Office.

ALABAMA AGENT CONVICTED IN FRAUD

assandra G. Smith of Jefferson County, Alabama, has been convicted of first and second degree insurance fraud, the Alabama Department of Insurance announces.

The indictment charged that Smith, a licensed agent d/b/a GSI Grant Smith Insurance received a down payment towards the victims’ annual homeowner’s insurance, but the policies were later canceled for non-payment after Smith kept An investigation by Hudgens’Fraud Commissioner Hudgens urges the payments. Smith, lied to the Division revealed that between anyone who conducted insurance victims claiming coverage was in 2015 and 2016, Webb allegedly transactions with Webb to contact place despite the policies having pocketed premiums payments for the insurance company listed on been cancelled. automobile insurance from her their policy to verify they have the clients instead of forwarding the coverage they paid for, or contact A jury rendered the unanimous money to the insurance company our Consumer Hotline at 1-800- verdicts Wednesday in Jefferson for coverage. At the time of the County Circuit Court. 656-2298. 16

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Lend A Helping Hand Florida Needs You Click Here To Donate

NOVEMBER 2017

Insurance Agents Helping The Community The LAAIA has set up a fund to help those who were hit the hardest by Hurricane Irma. Help us by clicking on the link and donate whatever you can (no amount is too small)

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NEWS

CALIFORNIA INSURANCE AGENT AND LAWYER ACCOMPLICE ARRESTED FOR $1.2 MILLION SENIOR SCAM Former insurance agent and lawyer accomplice arrested for $1.2 million senior scam

ANTA BARBARA, Calif. — Former insurance licensee Brett E. Lovett, 46, of Camarillo, and alleged accomplice Robert C. Burlison, 64, an attorney of La Canada, were arrested last week on multiple felony counts, including: theft, burglary, forgery, embezzlement, and conspiracy after allegedly defrauding at least nine victims of close to $1.2 million. “Foisting investment scams on innocent congregation members is particularly appalling,”said Insurance Commissioner Dave Jones. “Lovett and Burlison allegedly preyed on seniors causing a collective loss of more than $1 million.”

Burlison, a licensed California attorney and owner of Burlison Law Group in Pasadena, is alleged to have aided and conspired with Lovett in at least one of the crimes.

Lovett has a history of embezzling money from members of the places of worship he attends. In 2007, doing business as Northwest Asset Fund, he was ordered to pay more than $675,900 in restitution, fines Several of Lovett’s known victims and sanctions. Lovett never paid are senior citizens whom Lovett the fines or restitution. The CFTC allegedly met and befriended at entered a permanent injunction a place of worship in Carpinteria, against Lovett, who never California. Other victims sought registered with the CFTC. Between legal aid advice from Lovett through October 2002 and August 2005, his Legal Aid Information business. Lovett fraudulently solicited money Victims entrusted Lovett with their from individuals, purportedly to money for proposed investments trade commodity futures. that never existed, or for financial management purposes. Lovett Lovett was released from custody then misappropriated the money on $200,000 bail. Burlison, who was for his own personal use and released from custody on $250,000 to re-pay some of his victims -- bail, is scheduled to appear for sometimes using his Power of arraignment in Santa Barbara Attorney and Promissory Notes to Superior Court on November 1, embezzle funds from victims. 2017.

A 15-month investigation conducted by the California Department of Insurance, Investigation Division, in Valencia, revealed that between 2011 and 2016, Lovett, a former licensee of the Department, allegedly defrauded at least nine victims of nearly 1.2 million dollars. 18

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THE INSIDE TRACK - BREAKING NEWS Mercury to Take CA Case To Supreme Court

ercury Insurance recently lost a court of appeals ruling that affirmed the California insurance commissioner Davey Jones can keep the insurer from claiming $2.8 millin in advertising and marketing costs as an expense against profit. In a misleading and inaccurate statment, Jones asserted “No private company has a constitutional right to a guaranteed profit,” although Mercury was simply seeking the same common-sense accounting standards as allowed in the other 49 states. Mercury has vowed to take the case to the US Supreme Court.

Image Credit: Creative Commons

Lemonade Too Sour?

emonade, a two-yearold insurance company writing that bills itself as “peerto-peer” yet is anything but, announced recently it will limit gun coverage on the homeowner policies it sells to $2,500 and will not provide 20

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coverage for“assault weapons” altogether. The company, apparently intent on pushing a left-wing agenda, said as much in a post of CEO Daniel Schreiber, “The 600 casualties from one of the deadliest mass shootings in U.S. history made us rethink our coverage. ‘Guns’ is a polarizing topic, which is why most companies avoid it at all costs. But Lemonade was founded to make insurance into a social good. That requires being upfront about what we think ‘good’ is, and is not. When it comes to the Second Amendment, therefore, we can’t take the Fifth. After the awful massacre in Las Vegas, we’re not sure anyone should. This is why our policies limit the amount we will pay out for the damage or theft of firearms to an entirely adequate $2,500. If you own more than $2,500-worth of firearms, we recommend trying one of our competitors. Table of Contents

They seem to all offer additional coverage. We don’t.” We assume that conservative consumers of insurance who don’t desire to be lectured on gun control by their insurance carrier will choose another company - as they should.

NFL Cratering

FL ratings are down 5.1% from the same period last season and 18.7% behind the

same period in 2015. Most attribute the sharp decline to a number of athletes that have chosen to disrespect the flag and the national anthem by kneeling in protest. While most cannot articulate a valid reason for their protest, the NOVEMBER 2017

THE INSIDE TRACK - BREAKING NEWS fans see it as a big middlefinger to America and have responded by boycotting both the TV & stadium games.

Washington Insurance Producer Busted

Image Credit: Creative Commons

former Washington insurance producer and two others pleaded guilty to felony charges after investigations by Insurance Commissioner Mike Kreidler’s Criminal Investigations Unit (CIU). Additionally, a Tumwater man was charged with fraud and drug charges after causing a collision on Interstate 5 in King County. The former Mill Creek insurance producer was charged in June after an investigation by Kreidler’s CIU. Watson was an agent for American Family Insurance from 2011-2014 and stole more than $21,000 in premiums from his clients; Kreidler’s investigators identified nearly $29,000 in additional possible theft. Watson stopped selling insurance in December 2014 and Kreidler revoked his insurance producer license in August 2015.

NOVEMBER 2017

Report: 2017 Hurricanes Cost $200 Billion+

to more focus on it’s “high value-add products” like DSLR and a rumered fullframe mirrorless camera.

hree killer hurricanes, Harvey, Irma & Maria may Aspirin A Day Keeps end up costing over $200 Cancer Away? billion in damage and lost productivity. Experts point major new study out that recovery spending involving 600,000 may equal or even exceed the damage done to the people finds a remarkable decrease in a host of cancers economy by the weather. to those that take an aspirin a day. According to a report Nikon Closing China published on telegraph. Digital Camera Factories co.uk, “They found that people who had taken n a move blamed on the drug every day for an the rise of smartphones, average of seven years were Nikon has closed a large 47 per cent less likely to factory in China dedicated to develop liver or oesophageal cancer and producing compact 38 per cent cameras. “In recent less likely to years […] due to the be diagnosed rise of smartphones, with gastric the compact digital cancer. They camera market has were also 34 been shrinking per cent less rapidly, leading to a significant decrease likely to develop pancreatic in operating rate at [Nikon cancer, and had a 24 per Imaging (China)] and cent reduced risk of being creating a difficult business diagnosed with colorectal environment,” according cancer.” to a Nikon spokesperson. The move will allow Nikon

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NEWS

ELIZABETH BOYD PROMOTED TO FLORIDA DEPUTY CHIEF FINANCIAL OFFICER

ALLAHASSEE, Fla. – Chief Financial Officer Jimmy Patronis today announced that the Department of Financial Services’ long-time Legislative Affairs Director Elizabeth Boyd has been promoted to Deputy Chief Financial Officer. In this new role, Elizabeth will oversee the Department’s legislative affairs, research and planning, cabinet and communications offices, as well as the Division of Consumer Services and Division of Unclaimed Property. CFO Patronis said, “For six years, Elizabeth has advanced the Department’s legislative priorities and secured great success on initiatives important to enhancing the lives of all Floridians. Her expansive knowledge on insurance, finance and regulatory matters, as well as a broad understanding of the legislative process, makes her well-suited to lead our Department in this capacity.”

and other stakeholders. In this capacity, she assisted in the successful passing of legislation that included the creation of a homeowner claims bill of rights and the implementation of sweeping transparency reforms to Florida’s state contracting laws.

Elizabeth Boyd

Elizabeth’s legislative accomplishments led to her promotion to Legislative Affairs Director in December 2014, where she’s since served as the Chief Financial Officer’s Elizabeth joined the Department principal legislative advisor of Financial Services in September and lead lobbyist. As director, 2011 as Deputy Legislative Affairs Elizabeth has been instrumental Director. As deputy director, in securing several legislative she aided in the development victories, including a ban on of the Department’s legislative a medical billing practice agenda and advocated for the known as “balance billing” in Department’s initiatives in which health care providers front of the Florida Legislature bill patients for out-of-pockets 22

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costs not covered by health insurance and securing the end of a pervasive insurance business practice that derailed the proper payment of life insurance policies to beneficiaries. Prior to joining the Department, Elizabeth held legislative roles with the Department of Management Services, within the Executive Office of Governor Jeb Bush, and for the Florida Lottery. She earned a bachelor’s degree in communications from Florida State University. The Department’s current Deputy Legislative Affairs Director, BG Murphy, has been promoted to Legislative Affairs Director. Murphy joined the Department in February 2015, following his service as legislative assistant to Representative Halsey Beshears. In 2014, Murphy led the successful campaign of Representative Brad Drake. Murphy has also worked in management and corporate relations in the private sector. He earned a bachelor’s degree in political science from Florida State University. Both promotions became effective Monday, October 16. To learn more about the Department of Financial Services, visit www. myfloridacfo.com. NOVEMBER 2017

NEWS

REGISTRATION IS NOW OPEN FOR THE 2018 IRMI ENERGY RISK & INSURANCE CONFERENCE

allas, TX, October 25, 2017—International Risk Management Institute, Inc. (IRMI®), has opened registration for the 2018 IRMI Energy Risk & Insurance Conference (ERIC), to be held March 6–7, 2018, at the Royal Sonesta in Houston, Texas. ERIC is the place where insurance professionals and risk managers can be at the forefront of emerging trends, participate in strategic conversations, visit with specialists about day-to-day NOVEMBER 2017

realities, and build a network of experts to help secure success in their careers.

insurance needs,” said IRMI President and CEO Jack P. Gibson, CPCU, CRIS, ARM. “The Energy Risk & Insurance Conference The Conference will feature provides a unique opportunity numerous concurrent sessions to discuss best practices and and moderated discussions develop a powerful network of on emerging risks and new risk professionals who can help developments in the risks to solve problems.” which energy companies are exposed, risk management tactics To learn more or register, to deal with them, and insurance please visit https://www.irmi. that can be used to cover them . com/conferences/energy-riskinsurance-conference/ or call “Energy is a risky business, with (800) 827–4242. specialized and very complex Table of Contents

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NEWS - ANALYSIS This Month’s Workers’ Comp Fraud Story Sponsored By MyPEOAgency.

THERE IS WORKERS’ COMPENSATION FRAUD, THEN THERE IS ABUSING THE LITTLE GUY AS A SUB CONTRACTOR, WHILE COMMITTING WORKERS’ COMPENSATION FRAUD BY Michael Speizman

his guys (all related) made their living installing drywall. He needed a workers’ compensation policy right away as well as a certificate of insurance. I should have known something was up when the agency owner who normally took the walk-ins smiled and told me to take care of this nice gentleman.

n the early nineties, I was a struggling P&C agent working out of an office in Coral Springs. I hadn’t made many sales, when one day a guy walked into the office looking to get a workers’ comp policy. He was wearing work clothes and he looked (and smelled) like he just left his work site. He explained that he and Long story short, after spending a day figuring

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NEWS - ANALYSIS About The Author: Michael Speizman is a voting member of the Florida Workers Compensation Fraud Task Force. Michael has over 25 years’ experience with Employee Leasing and Professional Employers Organizations as both an owner and broker. He is an experienced HR Outsourcing consultant with My PEO Agency. Michael’s specialties include Blue Collar Industries, JUA, Staffing, Transportation and hard to place risks of all sizes.

out how to write the policy, get underwriter approval, I was able to call the guy back and tell him to bring me a check and I would hand him his cert. I was excited, as the expected commission was enough to pay a month’s rent and I was finally starting to make sales. Of course the check bounced and I never saw this guy again. My boss laughed and told me this was a good education for me. This was first exposure to what I am now calling Sub Contractor Abuse. The only thing better than saving money by paying a worker as a 1099 vs. a W4? (see previous article) not paying that worker at all by springing an insurance requirement on him at the last minute. Today this practice seems to have exploded, a company will sub out work to someone (not always but typically an immigrant and typically illegal) only to withhold payment a few weeks later until the sub can produce a workers’ compensation certificate. I know what you are thinking, the contractor could report the subs wages on his comp policy and withhold the premium from his payment to the sub, but that’s not any fun. What is fun is getting a NOVEMBER 2017

series of subs to show up, do work, and then later let them know it’s done for free. These contractors often have their subs sign long contracts that are one sided in favor of the contractor. Many of the Subs have limited English skills and no access to their own attorney to read the contract. Not that the contractor is going to re write, they will just find someone else who doesn’t ask questions. They find themselves signing away their rights and taking on additional expenses, (IE Employment taxes, Workers’ compensation, GL) that can severely reduce their expected profit from the work to less than minimum wage.

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Question for those of you who know workers’ compensation: What percentage of these contractors are even reporting the wages of their uninsured (and unpaid) subs to their carriers at audit? After all if they didn’t pay the sub, how do they owe premium? You can rest assured that if the sub is injured in the 1st couple of weeks, the carrier will pick up the claim, raising the cost for everyone else who is following the law. So now you know another way to commit fraud, by abusing your subs…

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NEWS

$1.2 MILLION WORK COMP SCAM LEADS TO ARREST OF FLORIDA CONSTRUCTION COMPANY OWNER Owner avoided paying $1M in premium payments

ACKSONVILLE, Fla. – Chief Financial Officer Jimmy Patronis and the Department of Financial Services (DFS) today announced the recent arrest of Carlos Contreras, owner of DJC Builders & Construction. Contreras allegedly obtained a fraudulent workers’ compensation policy by underreporting the number of staff he employed, the company’s annual payroll amount and the company’s scope of work.

companies lie to obtain cheaper, inadequate workers’ compensation policies, staff or property owners are left vulnerable to covering sky-high medical costs if a worker gets injured on the job, and free markets are disrupted by scammers who can underbid their legitimate competitors. It’s a lose-lose situation for Florida, and I won’t stand for it.”

Florida CFO Jimmy Patronis

If Contreras had accurately reported the company’s total payroll, number of employees and correct work description, the company’s proper workers’ compensation premium would have been $1,217,161. As a result of the scam, Contreras’

By providing false information on the application, Contreras illegally avoided paying more than $1,000,000 in premium payments for an adequate policy. CFO

Patronis

said,

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“When

Contreras claimed his company’s annual payroll was $273,786, and thus was quoted an annual workers’ compensation policy premium of $25,311. However, between January and August 2017, DFS investigators determined that Contreras cashed at least 620 payroll checks for DJC Builders & Construction. In total, nearly $6,500,000 in payroll was cashed using various money service businesses located across the state.

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insurance company was defrauded of more than $1,000,000. Contreras was arrested on October 19 and transported to the Duval County jail. He has been charged with one count of knowingly concealing payroll and one count of scheme to defraud. The case will be prosecuted by the Duval County State Attorney’s Office and if convicted, Contreras could face up to 60 years in prison.

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“The Final Authority on Everything!” WARNING!

The Advisor has been known to be politically incorrect and may send certain Millennials scurrying to their safe space. Also not recommended for Progressives who are easily offended. Please read at your own risk.

HOV? Not.

’m a little annoyed by the recent addition of HOV (High-Occupancy Vehicle) lanes on I-95 running through my city. Since all taxpayers pay for the lane, why should only a few have the right to use it? I don’t think it’s fair. What does the Advisor think? - B.A. Palm Beach Gardens, FL

ADVISOR

HOV lane serves its intended purpose only if it incentivizes that behavior. It serves no purpose whatsoever if vehicles that already or coincidentally carried 2 or more persons use the lane. What percentage of the traffic in an HOV lane is legitimate, incentivized, car-pool traffic? Who knows - but I’m betting less than 5% - which, if I’m correct, makes the entire concept almost useless. As to your complaint that you should be able to use the lane because it was built with taxpayer money - get used to it. You didn’t get to ride

on the space shuttle either. If HOV lanes significantly reduce traffic, it benefits everyone. If they do not reduce traffic they fit nicely into a huge collection of ill-conceived public boondoogles we all suffer from daily.

A Fowl Connection

fter the US Air jet crashed in the Hudson, I can’t figure out how a bird can bring down a giant passenger aircraft. Why not a grate over the engines to keep the birds out? S.B. Milton, S.C.

First, who decided that 2 people in a 7 person van is “high occupancy?” MOV or multiple occupancy would be more appropriate. HOV lanes exist for one reason: to reduce vehicular traffic by encouraging people to travel to a shared destination in one vehicle rather than multiple vehicles. An 30

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Image Credit: Creative Commons

The bird, or in the case of the Hudson splash-landing incident, a flock of geese, are ingested into the jet engines causing the aircraft to lose power. Modern jet engines can ingest a small bird (up to 4lbs), spit the pieces out the back and keep right on going. A big Canadian Goose, or several of them, impacting the fragile, rapidly spinning compressor blades of the engines at an impact speed of 200MPH is another matter. When a compressor blade lets loose, it becomes a piece of high-speed shrapnel quickly trashing the rest of the engine. Any “grate” covering the engine intake stout enough to NOVEMBER 2017

Large Bird Strike On Helicopter

survive a 200MPH goose would also impede airflow. A lighter grate would simply “slice and dice” the big bird on its way to impact the compressor blades with the same result as no grate at all. Even the space shuttle has bird impact concerns, although rocket engines have no air intakes. Impact Table of Contents

on ascent could seriously damage the shuttle’s heat shielding resulting in the type of re-entry disaster we saw on Columbia. During the critical landing phase, when the shuttle is a 100-ton unpowered glider, impact with a flock of big geese or turkey vultures could alter the flight dynamics of the shuttle sufficiently to shorten its glide path and cause it to touch down before reaching the runway. In fact, the shuttle did impact a turkey vulture on ascent in the past but fortunately the bird struck the fuel tank side of the rising space craft and did no damage - except, of course, to the turkey . www/underwritersinsider.com

220/440 Lic. Ins Agent Needed - Boca

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Insurance Agent With 220 License We are looking for Insurance Agent with License 220 In Kissimmee, Florida Are Full Time on Agency. Please call 407-847-2539 for Interview Ask for Alex Ramos alexinsurance@aol.com 17-6

Help us expand our Agency (From Home)!! We are seeking an energetic professional to work parttime in a virtual capacity assisting us with recruiting and supporting professional sales agents across the United States and Canada.For detailed information on our company and this non-sales virtual opportunity please contact us today with the following link http://apply. harvardbenefits.com/269541 16-10

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440 or 220 in Boca Raton, Part Time or Full Time Experienced or Trainee; Agent and Customer Service Rep in family owned agency in Boca Raton. Full or Part time. (Flexible Hours) Personal Lines CSR; salary plus bonus. Commercial Agent; 50% commissions and residual. Most important Florida markets and several national markets available. We can compete with the “Big Boys” with our national affiliations. Email your resume to agencyops@gmail.com. or FAX to: 561-416-7221. EOE 17-2

Tampa Area Commercial Producer Agency Established 2006 seeks Outside Commercial Producer. Cutting Edge tech! Generous Comp and Possible Equity Buy In. Experience and FL 220 a must! Resume’ to info@nusurance.com 16-10

Agent/CSR wanted, Ft. Lauderdale Area

Independent P&C agency is seeking to employ a licensed agent and/or csr, with experience in nonstandard and standard auto, homeowners, commercial auto and property insurance. Fulltime position M-F 9am - 6pm and every other Saturday 9am - 3pm. Must have a GREAT attitude and know how to be a team player. Email resume to Marlinsii@aol.com. 17-11

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Looking for inside / outside lic. experienced sales rep. Must know QQ/QF, Semcat and other software packages. Efax resume to 561-829-2055. Great office. 16-11

Inside P&C Insurance Saleperson-NJ 1-3 years experience needed for a P&C Licensed saleperson. Leads, incentives and $40,000 base salary & benefits all provided in a convenient Parsippany modern location. jimb@mgainc.net 17-11

440 or 220 Needed in Tampa

Needed Agent or Customer service rep, must have knowledge of personal lines and have a great personality for established Family owned agency. Send resume. idcccorp@msn.com 17-10

Licensed P&C Sales & Service agent: Tampa, FL

We are seeking the right sales and service person to be a part of our team which is focused on continuing to grow a 24 year insurance Agency. If you are an experienced licensed professional who is proficient in sales of home, auto, flood, umbrella and other personal lines of insurance and who is also diligent in following up after the sale with quality customer service, we could be your professional home. info@danceferrentino.com 17-11 NOVEMBER 2017

Outside Ins Sales Rep - Must be licensed South Palm Beach Co. Need home based / office outside insurance sales rep. Must have experience cold calling, networking grps and referrals a must. Most know how to type up and prepare a property commercial risk including acords, loss runs, etc. Pls email resume to: jonathandrausch@hotmail.com 16-11

Fresh out of School Insurance Sales Person Needed

We are doing a cooperative hiring with one of our carriers. Must be energetic, sales and commission motivated. It is a 2 yr salary with a transition to 100% commission, there is unlimited growth potential based on how good you are. Must be able to travel for 3 weeks of training to Philadelphia. Interview process is lengthy, but once we find the right person we are ready to go! larrytalbert@talbertservices.com 17-11

Help us to expand our Agency (From Home)!! We are seeking a super energetic and motivated professional to work in a virtual capacity assisting us with recruiting and supporting professional sales agents across the United States and Canada. For detailed information on our company and this non-sales virtual opportunity please contact me at: Nicole.lang@harvardbenefits.com Nicole.lang@harvardbenefits. com

Experience Commercial CSR Wanted Duluth GA We are a mid sized agency, looking to add to our family environment insurance agency. We are not related but have a great time together. Voted Best in Gwinnett for 7 yrs in a row. Best in Duluth 2 yrs. Must be able to handle a large volume of direct bill accounts. Multicarrier experience and Hawksoft Agency use is a plus. Bilingual is also good but not a requirement.

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Looking to buy a P&C agency in PB county. Please call 561-584-0732

Growing MGA is looking for a highly motivated & responsible individual. Duties include managing accounts from our distribution channel --- quoting, binding and servicing multiple lines of business. Incredible opportunity for someone looking to learn and grow in a company. Send resumes to info@ everiskpro.com 17-4

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Now Hiring All Positions Independent Agency Hollywood, FL Independent agency in Hollywood, FL. We are hiring for all positions, commercial & personal lines agent/account manager/processors/receptionist/bookkeeper. 220/440 experience preferred but not required.

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cpenate@newmanins.com 16-11

16-12 NOVEMBER 2017

BROWARD COUNTY ENTRY LEVEL ACCOUNT MANAGER

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LIFESTYLE Continued From Page 9

SLEEP: THE KEY TO SUCCESS body the sleep it needs to perform optimally, individuals are able to give 100% of themselves in all of their relationships which helps relieve stress, maintains positive mental health and leads to a more balanced work/ leisure lifestyle. “Productivity Illusion” As with Tom Brady’s key shift to a healthier lifestyle in order to enhance mental clarity, Amazon CEO Jeff Bezos explains how making “a small number of key decisions well is more important than making a large number of decisions. If you shortchange your sleep, you might be a couple of extra ‘productive’ hours, but that productivity might be an illusion.” When discussing the difference between interactions and decisions, quality is more important than quantity.

who does not disengage at the end of the day but instead constantly checks their emails in the evenings and on weekends are the ones with a greater chance of burning out or being less engaged over time. Cheri Mah, a researcher in the Stanford Sleep Disorders Clinic and Research Laboratory, “showed that basketball players at the elite college level

So, it seems the old adage “you snooze, you lose” couldn’t be further from the truth since a solid night’s slumber can optimize one’s success and holistic happiness.” were able to improve their on-the-court performance by increasing their amount of total sleep time.” This was demonstrated by an increase of nine percent in their freethrow shooting and an increase by 9.2 percent in their threepoint shooting.

Living the balanced work/ leisure lifestyle mentioned Improved Sleep Helps above helps people maintain Everyone Start Their Day the their edge over others. Anyone 34

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Right Way While the following habits may seem trivial, when added together, they help create a healthier mentality that leads to more success in all aspects of life. According to psychological research, “people who make their bed in the morning are happier and more successful than those who don’t.” Think about it this way instead – by taking 30 seconds when one first gets out of bed, your first accomplishment has already occurred, putting one in a “winning” mindset from the outset. Many successful people start their day early. This is only successful, though, with a reasonable, consistent bedtime routine if one wants optimal results. Upon rising, for the first 60 minutes do not engage in any work-related activities such as checking email, social media or even watching the news. Instead wake your brain up gradually with meditation, a healthy breakfast and exercise, and engaging in activities that feed your soul. Do this before jumping into the activities of the day. Once you have successfully taken the time to nourish your body and soul, it is time to start knocking out that “to do” list.

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LIFESTYLE Avoiding caffeine is another great strategy which gives the successful people an edge over the non-successful. While people assume they perform better with caffeine, it’s actually detrimental to most systems in one’s body. Because of its spikes, valleys and addictive quality, one actually underperforms when relying on America’s drug of choice. By nurturing one’s body in the positive ways mentioned above, healthy eating, deep, reparative sleep and regular exercise actually produce higher quantities and quality of energy than caffeine. After a few days without this stimulant, people find they develop more confidence and function better without it. Impulse control Related to the caffeine addiction, which creates jitteriness, agitation and irritability when consumed in high quantities and inconsistently throughout the day, those with sleep deprivation are usually more impatient and make poorer decisions than their counterparts. A study from UC Berkeley “found that after a poor night’s sleep, the parts of the brain NOVEMBER 2017

associated with automatic behavior were extra active, while the frontal lobes which affect self-control were more inhibited.” Therefore, anyone who is sleep deprived is more likely to respond instinctively rather than making conscious, healthy decisions.

need to commit to being truly asleep when sleeping and truly present while awake. He believes that “we all have an opportunity to put happiness within reach by building the right foundation for their lives, starting with a truly restorative night’s sleep.” So, it seems the old adage “you snooze, you Another study from Clemson lose” couldn’t be further from University found that people the truth since a solid night’s who didn’t get enough sleep slumber can optimize one’s had a “higher risk of being success and holistic happiness. impulsive and distracted, as well as [made] poor decisions.” As the Executive Editor Successful individuals need and Producer of “The Luxe to be able to make great List,” Merilee Kern is an decisions, especially in stressful i n t e r n a t i o n a l l y - r e g a r d e d situations, and emulate the consumer product trends atmosphere of the area that expert and hospitality they would like to project industry voice of authorityto others. A sleep-deprived -a travel, dining, leisure and person will have a more lifestyle expert who spotlights difficult time accomplishing noteworthy marketplace that goal. innovations, change makers, When one sleeps, the glymphatic system, known as the brain’s cleaning system, goes into overdrive. This reportedly purges your brain of “organic waste materials that build up during waking hours, removing unwanted proteins and metabolic waste.” By removing this waste, it protects your body from Alzheimer’s and other neurological disorders. In addition to Vaselli’s insights above, he urges that people Table of Contents

movers and shakers. She identifies and reports on exemplary travel destinations and experiences, extraordinary events and newsworthy products and services across all categories. Reach her online at www.TheLuxeList.com, on Twitter at www.Twitter.com/ LuxeListEditor, on Facebook at www.Facebook.com/ TheLuxeList and on Instagram at www.Instagram.com/ LuxeListReviews.

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Notable Quotes In The News

SAY WHAT?

Michelle Obama: Too Many White Men

Image Credit: Creative Commons

would see that in Congress. One of the most interesting points — I told you about this — is usually at the State of the Union address where, you know, you sit on the balcony and watch the State of the Union … when you’re in the room, what you can see is this real dichotomy; on one side of the room — it’s a feeling of color, almost — on one side of the room it’s literally grey and white. Literally. That’s the color pallet on one side of the room. On the other side of the room, there are yellows and blues and whites and greens; physically there’s a difference in color and the tone, because one side; all men; all white. On the other side; some women; some people of color.” Michelle Obama, doubling down on identity politics, making the overtly racist observation that Congress would work better if it was not, in her opinion, “all men; all white.” Democrats cannot seem to move beyond the failed idiocracy of only counting folks based on skin color, gender, or gender options and seeming to suggest that somehow an affirmative diversity policy should be applied to elections. 36

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California’s Insurance Commissioner Davey Jones In Liberal Hissy-Fit

o m e n have a fundamental right to control their reproductive lives. Access to contraceptives, which are used by 99 percent of women at some point in their lives, is a critical right that I will fight to protect. The Trump Administration has no business putting employers in the position of preventing women from accessing contraceptives. Trump’s regulations conflict with California law. We will fight for the rights of California women and to protect California’s laws. President Trump’s discriminatory policy violates a woman’s right to privacy, will result in unintended pregnancies, and increased costs to women for health care. California law requires that health insurance policies cover contraceptives. I will stand up for women’s reproductive rights and continue to enforce our state law. Millions of women and men marched on the day after Trump’s inauguration to send a message that we won’t stand for policies like these. It’s not too long ago that women were asked routinely in job interviews if they used contraceptives and when they planned to have children – we will not go back to those days and will fight President Trump in court to protect women’s reproductive rights.”

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A too-funny official prounouncement from California’s wacky-left insurance commissioner Davey Jones, already harshly criticized by his fellow insurance commissioners for interjecting himself into climate change politics, now claiming a simple health insurance proposal removing the requirement that contraceptives be provided without cost on Obamacare policies will deny “access to contraceptives,” “will put employers in the position to preventing women from accessing contraceptives” and “violates a woman’s right to privacy.” The fact that none of this is even remotely true didn’t even slow crazy-Davey down as he harkened back to another irrelevance when women were allegedly asked about contraceptives in a job interview. You can’t make this stuff up folks.

The “Whiteness” of Math

n many levels, mathematics itself operates as whiteness. Who gets credit for doing and developing mathematics, who is capable in mathematics, and who is seen as part of the mathematical community is generally viewed as white. School mathematics curricula emphasizing terms like Pythagorean Theorem and pi perpetuate a perception that mathematics was largely developed by Greeks and other Europeans. [There are so many people who] have experienced microaggressions from participating in math classrooms… [where people are] judged by whether they can reason abstractly.”

proves it by here published work, it is perfectly acceptable these days to be an in-your-face racist as long as you are directing your bigotry at the hated White race and their offensive “Whiteness.” Nevertheless, it is difficult to comprehend her position on exactly how nonWhites are being oppressed by the teaching of math. Is she saying that Blacks and Hispanics are unable to understand math? Or does she simply wish to discriminate against Whites because they are good at math? Perhaps, it is people like Gutierrez, with obvious low expectations for non-Whites, who are the real oppressers.

Only In America...

nly in America do we have to come up with things like white privilege and institutional racism because there’s not enough real racism happening to allow liberal minorities to feel like victims. There was a time in America when people wanted to feel strong, capable and able to handle their own problems instead of being victims. There still are people like that today and they’re called conservatives.”

John Hawkins, author and pundit in an excellent October 29th column titled The 6 Big Ways Liberals Are Destroying America’s Culture. Besides the vitimization of the country, he pointed out “Liberals work incessantly to split Americans in ever smaller groups that are at each other’s throats. This is incredibly dangerous to our future as a country because you can’t hold any group of people including The quote was from University of Illinois math a nation together long term when people no professor Rochelle Gutierrez in an article for longer believe they share the same goals and math educators titled Building Support for values as their neighbors.” Scholarly Practices in Mathematics Methods. In case you haven’t noticed and Gutierrez NOVEMBER 2017

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BACK ISSUES

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ANALYSIS - BARRY ZALMA Continued From Page 7

ZALMA My third week on the job I was assigned to a surety adjuster who explained to me, as we drove to job sites, how he was responsible for completing a freeway overpass after the contractor became bankrupt; what it was that he did to take over the business of the person for whom Fireman’s Fund stood as surety, and how the moneys paid were recovered from the insured and the security he posted to obtain the surety contract. I learned that a surety adjuster needed multiple skills including how to be a CEO, CFO, and job site manager of a construction site. At the end of the third week I started my studies at a night law school where I was instructed about contract, tort, and real estate law. Knowing nothing about the law I was a blank slate and moved right into what I was learning when I was assigned to ride with a bodily injury adjuster who took me with him to meet with insureds who had been in accidents and injured a third party to gather the facts of the accident and determine if the insured, under the law of torts, was liable for the injuries of the third person.

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If he determined the insured could be liable he would immediately contact the injured person, take a statement, and then attempt to negotiate a settlement. If the claimant had retained a lawyer I sat with the adjuster as he met with the lawyer and tried to quickly reach a settlement. In those days contributory negligence was a total defense so negotiation was relatively easy since any negligence on the part of the claimant would be a total defense. If settlement was not possible then we would travel to a defense lawyer’s office and assign the defense to a lawyer on our approved list. My first month as a trainee only required me to observe, listen, and say nothing until I was alone with the training adjuster who was ready to answer all the questions that came to me. I thought I was ready to work as an adjuster. Fireman’s Fund, correctly, disagreed. They had me sit for a month at a desk with experienced adjusters and supervisors for another month listening and learning. The Home Office Training School I was then told that I was required to travel to San Francisco to attend the Fireman’s Fund Home Office Training School. It was difficult for me because I would miss some evening law school classes, but earning a living with a Table of Contents

new wife and soon to have a child on the way, I made do and flew from San Francisco to Los Angeles to attend some, but not all of my evening classes. I was amazed when I reached the classroom in the Fireman’s Fund Home Office building. I was given a large three ring binder that was the text for the training and included, if I recall accurately: • • • • • • •

Homeowners policy wording. The California Standard fire policy. A Comprehensive General Liability Insurance Policy form. An automobile liability policy. An automobile comprehensive and collision policy. A jewelers block policy. A personal articles floater policy. A warehouseman’s policy. A motor truck cargo policy. A surety bond. A banker’s blanket bond. Multiple endorsements.

• • • • • • In addition to the policy forms that we were instructed to study when we reached our hotel rooms after class the text, borrowing from the Thomas book, also included: • • • •

Instructions on the parts of a structure. Details on how a frame dwelling is constructed. Details on different types of roofing materials. Details on different types of NOVEMBER 2017

ANALYSIS - BARRY ZALMA • •

•

• •

•

wall covering. Uses of lath and plaster. Use of Sanitas (a smooth white thin cloth wall covering that was placed over the plaster) to cover lath and plaster and allow smooth paint surfaces without cracks. Use of wall paper and how to evaluate the amount needed to cover a wall. Details on types of outside surfaces including stucco, brick, stone, etc. How fires start. How to detect the use of accelerants to destroy property by arson. How to write an estimate for repair or replacement of damaged property and calculate the amount of loss using books containing construction unit costs. Details on the parts of an automobile and how to evaluate the parts needed to repair an automobile after an accident.

The course included a large section on tort law, negligence, contributory negligence, and how to determine liability and complete an investigation into a third-party liability claim. This included: • • • •

The basic law of negligence. The basic law of intentional torts. The basics of a liability claims investigation including: Taking a recorded statement NOVEMBER 2017

•

of the insured and claimant. Taking a written statement of the insured and claimant if they refuse to be recorded. The use and operation of the disk recorder that we would be required to take with us for the purpose and how to save the plastic disks upon which the statement was recorded. Visiting the scene of the accident and documenting the scene with:

claims investigation. The last week was spent studying contract law and how to interpret and apply the terms, conditions and limitations of the insurance policy that applies to the claim investigated.

Throughout the month of training – even before the tort of bad faith had become a serious issue – I, and my fellow trainees, were taught incessantly that the 1. photographs, insurance policy was a contract 2. hand drawings, of the utmost good faith and 3. use of a measuring that, although we were only to wheel to obtain accurate pay claims that the policy agreed measurements for a scale to pay, it was our obligation to drawing of the accident conduct an investigation seeking scene. how to pay a claim and not how to deny one. We were to deal fairly • How to secure physical with insureds and claimants and evidence. to do nothing that would deprive • The use of experts including: the insured of the benefits of the policy issued to the insured. 1. Engineers, 2. P r o f e s s i o n a l More Training photographers, and After completing the Home Office 3. Accident reconstructionists. Training School program and two months of law school I was certain • How to find witnesses. I was ready to be an adjuster and • How to conduct a thorough allowed to work to adjust claims. claims investigation. Again, I was wrong. Fireman’s Fund insisted that I was properly The course then spent a great trained before I was allowed to deal of time on investigation deal with an insured. techniques. I had been trained by the Army in such techniques I spent two more months with but the course provided me with experienced adjusters in the field reminders of various techniques learning more about what an available and how to apply what I had learned as a counterintelligence agent, to insurance See Zalma Page 46 •

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NEWS MIAMI INSURANCE AGENT CHARGED WITH CREATING FAKE POLICIES TO RIP OFF PREMIUM FINANCE COMPANY

MIAMI, Fla. – Chief Financial Officer Jimmy Patronis today announced the arrest of Jose Manuel Caballero-Morlesin (Caballero), an insurance agent and owner of Axis Underwriters, Inc., a Miami-based insurance agency. An extensive investigation led by the Department of Financial Services, Bureau of Insurance Fraud unraveled a complex scam in which Caballero enlisted a finance company to pay annual premiums tied to fake insurance applications. In total, Caballero submitted 38 fake applications and stole $276,000 in premium payments. Caballero confessed to investigators and now faces up to 157 years in prison, if convicted. Many residential and commercial insurance policyholders are required to pay annual premiums up front. Insurance agencies partner with finance companies to front the cost of the annual premium, allowing the policyholders to make monthly installments to the finance company if they cannot afford to pay the full premium amount at one time. NOVEMBER 2017

During a six-month timeframe in mid-2016, Caballero submitted 38 applications for financing using made up consumer information. The unsuspecting finance company approved the applications and issued annual premium payments to Caballero’s insurance agency, Axis Underwriters, Inc. In time, the finance company grew suspicious when no policyholders came forward to

case to fraud investigators as a suspected scam. The Department plans to seek the immediate suspension of Caballero’s insurance license once formal charges are filed. Caballero turned himself in to authorities October 9, 2017, and has been charged with one count of organized scheme to defraud and 38 counts of forgery, uttering forged instruments, grand theft and the misappropriation of insurance funds. This case is being prosecuted by the Office of Katherine Fernandez Rundle of the Miami State Attorney’s Office.

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pay their monthly installments. The finance company reported their suspicions to the Department’s Division of Insurance Agent and Agency Services, which referred the Table of Contents

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TECHNOLOGY your message is successfully delivered by checking “Request a Delivery Receipt.”

you can turn on read receipt requests via the G Suite Admin Console. Go to Apps >> G Suite >> Settings for Gmail >> then click Advanced Settings. Here, Mozilla Thunderbird you can scroll down to the Email Here’s how to turn on return Keep in mind, these requests receipts in Mozilla’s email client Read Receipts section, where you’ll find this wordy option: only do half the job; the Thunderbird: recipient can still decline, and Click Tools (on the top menu “Allow email read receipts to you’ll never receive the receipt bar) then click Options. Now, on be sent to all addresses in my you’re hoping for. Some email the General tab click on “Return organization as well as the following email addresses.” platforms, like the version Receipts.” Switch it to “on.” of Gmail and Apple Mail, for example, do not officially Here you can expect support the sending of read Thunderbird to always include With this option on, you can click on the lower right down receipt requests. return receipts with your arrow on your Compose window emails. You can also send your Related: Can you spot a fake own return receipts and the to request a read receipt for the email? Take my phishing IQ test. location of your receipts. When particular email you’re writing. done, just click OK. Related: Take control of your As an alternative, you can use Gmail account with these five “invisible” email tracking and You can also configure read receipts, but here you’ll Thunderbird return receipts on tips to get a better handle of have to rely on third-party individual emails. While writing your inbox. tracking software. (More on a new email just click on Options that in a minute.) on the top menu bar then Use Email Tracking Software select “Return Receipts and or Maybe you have a small For the other major email Delivery Status Notification” business. Maybe you’re doing platforms, here’s how you set to configure its return receipt research, and you just need them up: setting. to know which emails were Again, as usual, the recipient opened and which were Outlook can choose whether to send a untouched. In this case, you might turn to third-party email To request a return receipt return receipt reply or not. tracking solutions. in Microsoft Outlook, click Options on the top menu bar to Gmail Most of these are paid services bring up its sub-menu. In the free version of Gmail, you with monthly subscriptions, but can’t request a read receipt. Now, just check “Request a But the feature is available via some have free basic plans, too. Read Receipt” to receive a Google’s paid business cloud These third-party trackers offer more features than your regular notification when your message software G Suite. free email client. is opened. Additionally, you Continued From Page 5

KIM KOMANDO

can also get notifications when If you are a G Suite subscriber, 44

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Get Notify NOVEMBER 2017

TECHNOLOGY One basic way to track your emails and get read receipts is Get Notify. For each message read, you’ll receive a notification. You will be notified of the exact date and time the email was read. You’ll also receive the recipient’s IP address, geographical location, operating system and which web browser they are using.

Streak Streak is a Customer Relationship Management (CRM) add-on for Gmail. Their free version has basic CRM features and email power tools. You can track 200 emails a month, which should be plenty for personal use.

Streak also has a Corporate Plan ($39/month) and an Enterprise Plan ($89/month) meant for GetNotify’s free version caps small to large businesses. your tracked emails to a Aside from full CRM features, maximum of five per day and these paid plans also include a total of 150 a month but you unlimited email tracking. can give a “small donation” to remove the daily limit and How else can you improve increase your monthly limit. your communications? Be sure to listen or download my podcasts, or click here to find it Mailtrack is a browser extension on your local radio station. You for Chrome, Firefox, and Opera can listen to the Kim Komando that’s designed to work with Show on your phone, tablet or Gmail. Mailtrack’s free version computer. From buying advice offers unlimited email tracking, to digital life issues, click here but your emails will be tagged for my free podcasts. with a Mailtrack Signature. This is typical for individual non- Copyright 2017, WestStar business use. Multimedia Entertainment. All rights reserved. For about $5 a month, you can get its Pro version to remove Learn about all the latest technology the Mailtrack signature. The on the Kim Komando Show, the Pro version also provides nation’s largest weekend radio talk tech support, notifications, show. Kim takes calls and dispenses and usage for three different advice on today’s digital lifestyle, email addresses. Finally, small from smartphones and tablets to companies can sign up for online privacy and data hacks. For the “Teams” plan, and large her daily tips, free newsletters and companies can sign up for more, visit her website at Komando. “Enterprise.” com Mailtrack

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NEWS Continued From Page 41

ZALMA adjuster does and being allowed to deal with parts of a claim, take a statement from an insured or a witness, and watch as the experienced adjuster resolved the claim. I was surprised that he had a checkbook and could write a check on his own to resolve a claim without seeking authority from someone else. My investigation skills were honed and directed toward insurance issues rather than the requirements of the U.S. Army, and taught how to gain information needed to resolve a claim. Finally, after months of training, I was allowed – under close supervision – to deal with minor claims over the telephone. I would handle low impact, minor injury accidents, small kitchen fires, thefts of two or five items. Before I could agree to settle a claim that I had investigated over the telephone, I needed to meet with my claims supervisor, explain the results of my investigation and evaluation of the claim, and obtain approval of my recommendations.

allowed to resolve claims on my own without first obtaining approval from the supervisor. I was expected, however, to consult with the claims supervisor or claims manager whenever I was uncomfortable with the claim or what was needed to resolve a claim. I’m Finally an Official Claims Representative After a year on the job and a thorough review of my training period I was determined to be a fully trained adjuster and given a business card showing I was a Fireman’s Fund Claims Representative. For the next year I worked chained to a desk dealing with first and third-party claims and adjusting and investigating them by telephone. I used location based telephone directories to identify independent witnesses by telephoning neighbors and businesses near the accident or loss location. Remember, there were no computers, no GOOGLE, no MapQuest, no cell phones. Everything was done in person or by telephone. I was good at what I did and my law school training gave me tools that the experienced adjusters did not have.

Fireman’s Fund made me a field After a year of close supervision, claims representative. I was given I was granted some small a company car, a ladder, a portable discretionary authority and Edison Disk Recorder – for 46

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statements – a tape measure and a wheeled devise for measuring large sites, and assigned to adjust claims and become part of the professional claims staff. I had been a professional investigator during my Army career and I was able to schedule my time efficiently. As a result of my experience and law training I was able to resolve more claims, efficiently and fairly than my colleagues. I learned, with the help of a professional reconstruction contractor, how to estimate damages and prepare a complete scope of loss that could be followed by any reconstruction contractor. I overcame my fear of heights by climbing on roofs to determine whether the damage was caused by wind, rain, old age or, in at least one case, a racoon. Regardless of my experience and competence I, and my employer, expected that I would continue my training every day I was employed. I would study the Fire, Casualty and Surety Bulletins (FC&S), legal opinions from coverage counsel, reports on new case law that was important to the claims business, and everything I learned in law school as it related to my work. I had available the school’s law library to do research needed to deal with a claim I was working.

See Zalma Page 48 NOVEMBER 2017

BECOME A CERTIFIED EXPERT IN CORPORATE PROPERTY INSURANCE AND A CERTIFIED EXPERT IN CORPORATE LIABILITY INSURANCE Now available from Illumeo and Barry Zalma!

veryone involved in insurance – either as an insurer or as an insured – requires excellence in claims handling. Businesses need to deal with insurers who have an excellence in claimshandling mandate. Insurers who wish to profit need an excellence in property and/or liability claims-handling program. Everyone in business needs an insurer who has an excellence in property or liability claims-handling program in effect. Two comprehensive programs enabling insurance professionals to become Certified Expert in Corporate Property Insurance and/ or Certified Experts in Corporate Liability Insurance are available from Illumeo.com and https://www.illumeo.com/curriculum/certifiedexpert-corporate-property-insurance and https://www.illumeo.com/ curriculum/certified-expert-corporate-liability-insurance. The programs are complete courses of study providing education and training to allow insurance professionals, after completing the individual classes, to become a Certified Expert. The programs cover everything an employee, an officer, or a director of a corporation needs to know about the need to acquire proper insurance and to resolve any claim presented by the corporation to the insurer. Major topics of study include, but are not limited to: the importance of insurance; how to acquire insurance and understand an insurance policy; the methods used by insurers to investigate claims; the various types of insurance that corporations need; the duties and obligations of a public adjuster; and how The full curriculum of the courses and other courses from Barry Zalma are available at http:// www.ilumeo.com by entering in the search bar the word “zalma.”

NOVEMBER 2017

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ANALYSIS - BARRY ZALMA Continued From Page 46

ZALMA As a fully trained and experienced adjuster I was given mostly a free hand to resolve claims and was sufficiently proficient and effective until I passed the California Bar Exam and became a lawyer.

or no training. Experienced and professional adjuster like those I learned from, have been laid off or fired to save their salaries and replaced with recent college graduates who can be retained for half as much money.

Removing experience claims personnel, closing down adjuster training programs, and limiting the amounts paid to the claims staff, increased the profits of the insurers for the short term. Modern Adjuster Training Insurance, however, is not a shortterm business. The 2017 When the It is gauged, not hurricanes and wild fires have claims staff is on a quarter of a year but made it clear made up of claims people a quarter of that there is century. a shortage of who treat all insureds a Insurers must experienced and claimants with good think in the and professional long term, not faith and fair dealing insurance claims short-term adjusters. For and provide excellence in gains. the last decade claims handling, litigation or two insurance companies have between the insurer E x c e l l e n c e attempted to in Claims increase profits and its insureds will be Handling by cutting back reduced exponentially.â&#x20AC;? The promises on expenses. made by an As a result, insurance policy are kept by home office training schools, like the professional claims person. the one I attended, have been Keeping a professional claims shuttered and are almost nonstaff dedicated to excellence in existent. claims handling is cost-effective over long periods of time. A Training programs like mine professional and experienced are as rare as snow in Palm adjuster will save the insurer Springs, California. Young college millions by resolving disputes, graduates are hired and sent out paying claims owed promptly and as insurance adjusters with little 48

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fairly, and by so doing avoiding litigation. Claims professionals resolve more claims for less money without the need for either party to involve counsel. A happy claimant satisfied with the results of his or her claim will never sue the insurer. Young, inexperienced, untrained adjusters make serious mistakes, offend the claimant, and drive the claimant to a lawyer who will sue the insurer seeking both contract and tort damages including punitive damages. Claims where an insured or claimant is represented by counsel costs more to resolve than those where counsel is not involved. Prompt, effective, professional claims handling saves money for both the insured and the insurer. The professional claims person fulfills the promises made when the insurer sold the policy quickly, fairly and efficiently. The inexperienced, unprofessional, untrained adjuster will deny a claim based on a poor reading of the policy, will fail to properly investigate, or will not recognize a fraudulent claim, all to the extra and unnecessary expense of the insurer. When an insurer compromises on staff, profits, thin as they may have been previously, will move rapidly into negative territory. Money saved on the expense side of the ledger will be overcome by NOVEMBER 2017

ANALYSIS - BARRY ZALMA

• •

•

claims staff, to fulfill the promises made. Are competent investigators. Have empathy, and recognize the difference between empathy and sympathy. Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals. Understand how to repair damage to real and personal property and the value of the repairs or the property.

A Proposal to Create Claims Professionals

Professional claims handling saves money for both the insured and the insurer.

the expense of defending lawsuits seeking contract, tort and punitive damages. The shareholders of the insurer will quickly question why they invested in the business of insurance. Insurance company management will lose their jobs and wonder why they ever became involved in the insurance business. Those who stay in the business of insurance will either adopt a program requiring excellence in claims handling from every member of their claims staff, or they will fail.

making business. Insurance is not a charity. Insurers who have done so must rethink the firing of experienced claims staff and reductions in training to save “expense.” Only with an excellence in claims handling program and philosophy can an insurer avoid charges of breach of contract and the tort of bad faith. The excellence in claims handling philosophy requires the maintenance of insurance claims professionals who:

Insurance is a business that must, • like all other businesses, make a profit to survive. Those insurers without a professional claims staff • must change—this time for the better—if it is to survive as a profit NOVEMBER 2017

To avoid claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers must maintain a claims staff dedicated to excellence in claims handling like the old Fireman’s Fund where I learned about insurance. By so doing they will not avoid all conflicts with insureds, claimants and Departments of Insurance, but they will avoid most. The professional adjuster recognizes that they are obligated to assist the policyholder and the insurer to fulfill all the promises made by the insurer in the wording of the policy fairly and in good faith.

Can read and understand the To create a claims staff dedicated insurance policies issued by to excellence in claims handling every insurer must, at least: the insurer. Can understand the promises made by the policy and their obligation, as an insurer’s See Zalma Page 50 Table of Contents

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ANALYSIS - BARRY ZALMA Continued From Page 49

ZALMA •

•

Find and hire as many insurance claims professionals as are available. Be ready to pay a fair salary, with benefits and a company car, to the professional adjusters on staff. If professionals are not available, the insurer must train all members of the existing claims staff to be insurance claims professionals. If not available in the company obtain training from: 1. local colleges, 2. Insurance training organizations, 3. Insurance web based training, 4. Text books, 5. The FC&S Bulletins, and 6. The CPCU Society and other insurance organizations. 7. Training each member of the claims staff annually on the local fair claims settlement practices regulations.

•

Training can be obtained from local independent insurance adjusting firms, independent law firms, and online. Using sufficiently knowledgeable people to The Underwriter’s Insider

supervise each claims handler adjusting firm or a law firm. closely to confirm all claims are handled professionally To keep the professional claims staff operating efficiently and in and in good faith. • Explaining to each member of good faith they must be honored the claims staff the meaning of with increases in earnings and perquisites. The the covenant I am insurer must of good faith and fair concerned that make clear to all employees that dealing and the lack of professional it is committed that it is the claims personnel will to immediately philosophy eliminating staff of the insurer make it impossible for members who that every the insurers to deal do not provide claim be handled in with the hurricanes, excellence in claims handling such a manner wildfires, and other and must that nothing is done to catastrophes because be ready to publicly and deprive the they don’t have quickly fire insured of the benefits available a sufficient those who do not provide of the policy staff of professional e x c e l l ence to which the claims handlers.” in claims insured is handling. entitled. • Demanding excellence in claims handling from the When the claims staff is made up of claims people who treat all claims staff. • Being ready to dismiss any insureds and claimants with good claims handler who fails to faith and fair dealing and provide treat every insured with good excellence in claims handling, litigation between the insurer faith and fair dealing. and its insureds will be reduced If any experienced claims exponentially. professionals exist on the insurer’s staff, the insurer must cherish Those insurers who decimated and nurture them and use their their professional claims staff to experience and professionalism save expense must recognize that to train new claims people. Do there is no quick and easy solution not refuse reasonable requests to the lack of a professional for an increase in salary and lose claims staff providing excellence the adjuster to an independent in claims handling. The training Table of Contents

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ANALYSIS - BARRY ZALMA takes time; learning takes longer, and the insurer must be willing to take the time needed to train claims people by spending the time Fireman’s Fund spent on me. The excellence in claims handling program requires thorough training providing each member of the claims staff with a minimum of the following: •

• • •

•

How to read and understand the contract that is the basis of every adjustment, including but not limited to: The formation of the insurance policy. The rules of interpretation. Tort law including negligence, strict liability in tort, and intentional torts. Contract law including the insurance contract, the commercial or residential lease agreement, the bill of lading, non-waiver agreements, proofs of loss, releases and other claims related contracts. The duties and obligations of the insured in a personal injury claim. The duties and obligations of the insurer in a personal injury claim. The duties and obligations of the insured in a first party property claim. The duties and obligations of the insurer in a first party property claim. The Fair Claims Practices Act and the regulations that enforce it. NOVEMBER 2017

The thorough investigation: • • • • • • •

• • •

• •

• • • •

Basic investigation of an auto accident claim. Investigation of a construction defect claim. Investigation of a non-auto negligence claim. Investigation of a strict liability claim. Investigation of the first party property claim. The recorded statement of the first party property claimant. The recorded statement or interview of a third-party claimant. The recorded statement of the insured. The red flags of fraud. The SIU and the obligation of the claims representative when fraud is suspected. Claims report writing. The evaluation and settlement of the personal injury claim. How to retain coverage counsel to aid when a coverage issue is detected. How to control coverage counsel. How to instruct coverage counsel on the issue to be resolved. Dealing with a plaintiff’s lawyer. Dealing with personal injury defense counsel. Dealing with insurance coverage counsel. How to retain and obtain information from experts needed to resolve a claim. Table of Contents

• • •

The evaluation and settlement of the property damage claim. The Appraisal process. Arbitration and mediation and the claims representative.

Conclusion I have spent 50 years in the business of insurance and do not regret a single moment of my career. By writing, lecturing and conducting webinars I have attempted to help insurers and their claims staff become professional and provide excellence in claims handling. I am concerned that the lack of professional claims personnel will make it impossible for the insurers to deal with the hurricanes, wildfires, and other catastrophes because they don’t have available a sufficient staff of professional claims handlers. Adjusting claims can often be difficult and emotionally draining on those insured. Catastrophes multiply the difficulty and emotions, requiring a professional claims handler to avoid disputes. Lack of adequately trained and experienced claims handlers can result in a windfall to the policyholders lawyers. Perhaps, if insurers are hurt sufficiently they will understand the need for acquisition, training and maintenance of a staff of professional claims handlers ready to provide excellence in claims handling. www/underwritersinsider.com

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